The mosque attack in Egypt’s Sinai may only strengthen the view that the country needs continued IMF support as agreed a year ago and the economy is likely to quickly shake off any negative repercussions, economists say.
Gunmen carrying the flag of ISIS killed more than 300 worshippers in the attack on the mosque, the worst such attack by militants in Egypt’s modern history.
Tourists and investors seem unlikely to be much deterred by the attack, which took place in an isolated spot far away from Egypt’s main tourist resorts and economic centers.
“It won’t have an impact,” said Reham Eldesoki, a senior economist at regional investment bank Arqaam Capital. “It’s so far away from South Sinai. There have already been other terrorist attacks in northern Sinai and they haven’t impacted European tourism or any other sort of tourism.”
The tourist industry is gradually recovering from the turmoil of a popular uprising in 2011 and the 2015 downing of a Russian airplane over Sinai that killed all 224 passengers and crew on board and devastated the industry.
An official at one of Egypt’s larger tourist companies, who asked not to be named, said it was too early to judge the impact of last week’s attack.
“We haven’t felt it in our reservations. After some attacks, we have had cancellations and reduced bookings. But until now we haven’t felt anything this time because it was the weekend,” he said. “Until now it has been smooth, without problems.”
A spokesman for Thomas Cook said that there had been no noticeable impact from the attack on demand for holidays in Egypt, and that sales to Egypt on Monday were trending ahead of last year’s sales.
The state statistics agency CAPMAS said 826,000 tourists arrived in October, the highest number in two years but still well below the 1.49 million who visited Egypt in October 2010.
Economists said short-term money market investors were similarly unlikely to be put off by the Sinai attack.
Egypt has put a mechanism in place that guarantees the exchange rate for foreign buyers of Egyptian pound treasury bills at the time of redemption. Foreign exchange and economic risk is at their lowest in years, Eldesoki said.
Foreign investors, lured by a sharp devaluation of the Egyptian pound last year and high interest rates, have increased their holdings of Egyptian treasury bills to over 330 billion Egyptian pounds ($18.6 billion).
The Sinai attack should likewise have little effect on longer-term direct investment.
1 hour ago in Variety
1 hours ago in Economy
1 hours ago in World
4 hours ago in Middle East
5 hours ago in Middle East
6 hours ago in Middle East
6 hours ago in North Africa
7 hours ago in Middle East
8 hours ago in Gulf
8 hours ago in Economy